Wednesday, May 12, 2010

Swan backtracks on promise and cuts $1.1 billion from forward estimates

THE Rudd government has ripped more than $1 billion out of its forward estimates for Australia's foreign aid program, targeting development assistance to take the second-biggest cut of this budget.

Three years after pledging to increase Australia's development aid from 0.28 per cent of national income to 0.5 per cent by 2015-16, the government admitted in the budget papers that it has only got to 0.31 per cent so far, and plans to reach only 0.35 per cent by 2012-13.

While the Government says it remains committed to reach the target, it has now left more than two-thirds of the distance to be covered in the second half of the trip.

The budget papers reveal that $1.1 billion will be cut from the forward estimates of the aid budget over the next four years, including $270 million in 2012-13 providing a quarter of the surplus in that year.

The aid budget will still keep growing, with spending in 2010-11 forecast to grow 9.1 per cent in real terms, after being held flat in 2008-09.

Programs in individual countries will grow from $2.38 billion to $2.65 billion. The biggest increases will be in aid to Afghanistan, which will double to $106 million to pay for an increased Australian police role and improve the Afghan government's capacity to deliver services.

Development programs in Africa will grow almost 35 per cent, and there will be a similar rise in funding for a range of global programs to tackle humanitarian needs, develop human rights, support business projects and develop local leadership.

Indonesia ($459 million) and Papua New Guinea ($457 million) will be the two biggest recipients of Australia's aid, followed by the Solomon Islands ($226 million), Afghanistan ($123 million), Vietnam ($120 million) and the Philippines ($118 million).

Foreign Minister Stephen Smith said the aid budget would reach 0.42 per cent of GDP by 2013-14, the last year of the forward estimates. "Australia is doing its bit to help developing countries achieve the global Millennium Development Goals by 2015," he said.